Large U.S. Employers Face 8% Health Care Cost Increase in 2006, Survey Finds
Health care costs for large U.S. employers in 2006 will increase by 8%, a smaller rate of increase than in recent years, according to the 17th annual Towers Perrin Health Care Cost Survey released on Wednesday, Reuters/MSNBC.com reports. The survey involved data collected from more than 200 large employers, who provide coverage to more than five million workers, retirees and dependents. According to the survey, average premiums per employee in 2006 will increase by about $600, and employees will cover about $155 of that increase.
The survey also found that employees will cover about 20% of the cost of health insurance premiums in 2006. According to the survey, in addition to efforts to shift more of the cost of health care to employees, employers plan to promote use of generic medications and implement health risk assessment and wellness programs to help reduce costs.
Ronald Fontanetta, a principal at Towers Perrin, said, "Employers have concluded there are inherit limits in controlling costs through cost shifting. They are trying now to focus on core drivers of health care expense" (Reuters/MSNBC.com, 9/28). In addition, Fontanetta said that the increased health care costs have led to decreased pay raises. He added, "As health care grows faster than other reward programs, that will have an impact on the companies' ability to subsidize programs like retiree medical coverage or raise pay. There are practical limits on how big that overall pie can grow" (Bloomberg/Winston-Salem Journal, 9/29). The survey is available online.